The old ways of securing a home loan have gone the way of the Dodo. Nobody has time to sit at a bank and pour over mountains of paperwork and data, let alone work around their schedule. Uno, an Australian-based online mortgage broker, is on a mission to meet the technological demands of mortgages by offering a service that will help its customers get the best rate possible.
Uno brokers all types of mortgages and doesn’t shy away from specialty cases, such as self-employed individuals or those with multiple income streams. Vincent Turner, CEO and founder of the new company, spoke with RewardExpert about his journey to solving a big problem for Australian consumers.
How Uno Got Started
Turner definitely has the spirit of an entrepreneur. He dropped out of school when he was 20 years old to pursue his dreams. He has traveled back and forth between Silicon Valley and Australia many times during his entrepreneurial journey in search of the perfect solution. Traditional lending models were slowly fading, but it seemed that any new or improved solution only benefited the banks and not the customer.
“I wanted to figure out how to work with the customers directly,” said Turner. A close friend of his encouraged him to return to the United State In 2010, adamant that there was a need for his software in the online lending space. After spending a few years in Silicon Valley, he returned to Australia with a new sense of direction.
Uno launched in 2016 with their one-of-a-kind software product that provided consumers with the confidence that they are receiving the best deal when working with uno.
Uno’s 4 Key Solutions to a Broken Lending Model
Almost all new businesses face obstacles either before, during or after launching the business, and uno is no exception.
“Mortgages are highly valuable, infrequent, emotional transaction and we’re asking you to do it with a new brand and a new way. So that’s been a big challenge for the first year or so.”
Although the company is still very young, they’ve done a great job of ensuring their place in the online mortgage broker space. Here are four things that uno really sets apart from the competition.
1. The customer is in the driver’s seat. Turner said no other competitor works directly off the ability for customers to “feed everything in themselves” in terms of inputting or submitting all the data, details and all the prices. He believes that it’s important to the customer to retain control of the process.
2. They work with more lenders. On average, the banks pay mortgage brokers more than $2 billion per year in commissions. In Australia, brokers tend to use just one or two banks, even though they advertise working with 20 to 30 banks. In fact, 75% of the deals are sent to about three banks. Uno crushes that number by sending 75% of their deals to 12 banks.
3. No third-party advisors. All uno’s advisers (also known as brokers) work directly for the company, so they aren’t just a third party. “As a result, the behavior is different because they aren’t getting paid commission. They aren’t trying to close a deal, they’re trying to help people,” said Turner. Commission-based advising is a broken model because the customer’s mindset is that the broker is getting paid to close the deal, whether it’s the best terms and rates available or not.
4. On-demand service. Additionally, by removing the need for face-to-face meetings, the lending process becomes faster and more efficient because there are no geographical limitations. “With the customers it’s kind of an on-demand service, which is kind of cool.” However, he said it’s not for everyone because some people like to meet in-person when dealing with such an important life decision.
But uno can’t solve all the problems associated with the lending and borrowing process. Like any developed nation, there are regulations, monopolies and dishonest companies to watch out for. For example, four banks issue 75% of the mortgages in Australia, while it’s not even likely that Australia has more than 100 lenders. The biggest obstacle, he said, is the level of standardization—or lack thereof—in the industry.
Acquiring customers is also a major hurdle because Aussies are very loyal to their bank of choice. When you couple that with the above stat (four banks receive 75% of the business), well, you better be an excellent negotiator or offer them something they can’t refuse.
Full Transparency With the Better Deal Challenge
More than 1 in 3 homeowners are not confident they got the best deal on their home loan. To prove they are committed to helping their customers secure the best mortgage possible, uno launched the Better Deal Challenge. Uno promises that if you find a better deal, they will pay the difference for an entire year. This method also helps ensure they’re doing their job properly as well.
“People want to feel like they’ve got the best deal, and programs such as this makes them feel confident,” said Turner. Here are some details about the program:
- Uno pays the difference between the total cost of the first year of their proposed loan and your Better Deal 90 days after your uno Home Loan settles.
- The better deal you’ve gotten must be comparable to the deal uno proposed. This means identical term, rate type, repayment type, structure and product features to the uno home loan described in the provided Credit Proposal.
- You must provide a credit contract or credit proposal within 72 hours of receiving uno’s credit proposal.
Turner doesn’t see uno slowing down anytime soon and expects they will continue to grow at a very rapid pace. Although lending has become much more dependent on technology, Turner predicts that, due the sensitivity of the matter, humans will always be a part of the lending/borrowing process.